Marathon Oil said it will temporarily suspend quarterly dividends after reporting a first-quarter loss blamed on a sharp decline in demand caused by the coronavirus pandemic.
The Houston energy company on Wednesday said it lost $46 million in the first three months of the year compared with a profit of $174 million in the same period a year ago. Revenues rose slightly to $1.23 billion from $1.2 billion a year earlier.
“While returning capital to our shareholders remains a core Marathon Oil objective, we are temporarily suspending our dividend and share repurchase program, prioritizing our liquidity and balance sheet during this period of heightened uncertainty,” CEO Lee Tillman said in a statement.
Oil producers, including Marathon, have made deep cuts to capital spending and operating budgets in response to the oil crash. Marathon has cut at least $1.1 billion, or 50 percent, from its 2020 capital budget, which now stands at $1.3 billion. The company also cut $350 million in expenses tied to sales and administration, shipping and handling, and production taxes.
Marathon produced an average of 207,000 barrels of oil per day, higher than its estimate. The company expects its domestic crude production to decline by about 7 percent as it halts nearly all of its well completions during the second quarter.
The company, which has some 2,000 employees, said it has reduced its U.S. workforce by 16 percent and its contractors by 70 percent.